Shipping from Hong Kong to Singapore: Freight and eCommerce Shipping

Benedict Leong

Image of Ocean freighters at Hong Kong port

 

As a developed nation, Singapore has the infrastructure to support both eCommerce fulfilment and also be a well-connected regional trade hub. The country is 100% urbanised,1 and its internet penetration is at 88%.2 Among Singapore’s internet users, 74% of them have bought items online.3 We’ve also covered Singapore’s eCommerce market extensively in our downloadable Singapore country guide.

In some ways, Singapore and Hong Kong are quite similar. Both strive to be world-class free-trade ports with business-friendly and trade-friendly regulations and policies and both function as gateways to their respective geographies.

If your business in Hong Kong or China isn’t currently shipping to Singapore, this guide covers the pros and cons of shipping via air and sea freight to the Lion City, while providing a general breakdown of the international shipping process. It also covers some of the customs requirements for your orders to clear Singapore customs.

When should you use air freight or sea freight?

Speed

If speed is vital to your supply chain needs, then air freight’s shorter delivery timings are worth considering. When not looking at other legs of the journey, a flight from Hong Kong to Singapore will take around a day at most. Sea freight could take a few more days to a week depending on the schedule.

Cost

On the other hand, you need to ensure that the profit you make on these shipments can justify air freight’s higher rates compared to sea freight.

Interestingly though, there are actually times when air freight can be cheaper than sea freight. To understand this, it helps to see how air freight rates are calculated.

For air freight, rates are charged to the order’s volumetric weight (how much space it takes up) or its actual weight depending on which is greater. For less-than-container-load shipments, sea freight tends to be charged by volumetric weight, with a minimum chargeable volume being 1 cubic metre (cbm).

Sea freight saves you money if your order is larger than 2 cbm. However, you don’t get those economies of scale for items that aren’t that big like small cartons that take up between 0.5 to 0.9 cbm since you’re paying for unused space. This is where air freight can be more economical than sea freight.

Fortunately, you don’t need to work all of this out on your own. Logistics service providers like Janio can help advise you on whether air freight or sea freight is better suited to your current leg of the supply chain and also offer you both shipping modes for your orders. To find out more, reach out to us below:

Need to Ship to Southeast Asia via Sea, Air or Cross border Trucking? Get a quote here!

Items shipped

When choosing between air freight and sea freight, consider the following:

  • The weight and size of your shipment
  • The products being shipped
    • Fragility
    • Perishability
    • Hazard
    • Shipment Speed

Air freight is fast, but can be limited in terms of what you’re allowed to ship. Bulky or oddly-sized items, or items too dangerous to meet air freight’s restrictions on what can be shipped generally should use sea freight instead.

For instance, these products generally can’t be shipped via air freight: products containing gases, all things flammable, toxic or corrosive items like batteries, magnetic substances like speakers, perishable items and more. If you’re shipping these, it makes more sense to use sea freight.

B2C and B2B Shipping from Hong Kong to Singapore in 4 Steps

The logistics supply chain from Hong Kong to Singapore can vary depending on your requirements and location. However, shipping from Hong Kong to Singapore would usually be done in these steps.

Hong Kong: First Mile Delivery

First mile delivery in international shipping is where your order leaves your origin address to head to your shipping partner’s local warehouse. The origin address can be a storefront, office, or warehouse belonging to either you or your supplier. Prior to your goods leaving your storage facility, the products have to be packaged and labelled appropriately to facilitate smooth cross border shipping.

If you’re shipping with Janio, goods from areas near Hong Kong may also be trucked to Hong Kong for export. Hong Kong has more business-friendly regulations and policies, which makes importing and exporting from here smoother and faster compared to exporting certain types of goods directly out of the mainland.

Your goods’ first mile delivery destination varies depending on the type of order you are shipping. If you are shipping a bulk order which is already containerised (e.g. Full Container Load) or palletized, they can be sent directly to Hong Kong International Airport or the Port of Hong Kong.

If you are shipping loose parcels, on the other hand, they’ll need to be consolidated at your shipping partners warehouse. Here, they’ll be consolidated into pallets for air freight or consolidated together with other orders in a container if you were shipping an LCL (less-than-full container load) sea freight order.

While transporting your goods, your packages may go through bumpy rides from events like turbulence. Thus, having extra padding is recommended especially for fragile items, like using bubble wrap and packing peanuts. This is to prevent your goods from bouncing around in the packaging or getting deformed during shipping. To learn more about the best practices in packaging your goods, we’ve covered this topic in a previous article.

On top of that, you need to ensure that your shipping labels and customs documents are labelled clearly and accessible for customs inspection. Check out the best practices in labelling your shipments which you can also find in our B2C Southeast Asia shipping resources, too.

When you’re ready to hand over your shipments to your logistics partner, you can choose to have it picked up from your address or drop off your shipment at your shipping partner’s drop-off point. Most shipping partners would have a cut-off time for submitting orders so that they can optimise their route.

B2C parcels will typically be consolidated at a transportation hub along with other packages with the same destination country prior to customs clearance. Otherwise, B2B shipments can be transported directly to the origin warehouse for customs clearance since they already make up a larger weight and volume compared to individual B2C shipments.

Hong Kong Origin Customs Clearance and Freight

Once your orders are consolidated, they’ll head to your logistics service provider’s air cargo agent’s warehouse at either Hong Kong International Airport (HKG) or one of your logistics service provider’s warehouses at the Port of Hong Kong (HKHKG) depending on which freight mode you’ve selected.

At the port or airport, officers from the Hong Kong Customs and Excise Department will inspect your shipment and their documents to see if they can be cleared for export from Hong Kong. The documents that are usually needed for customs clearance at this stage are:

  • Export permit
  • Commercial invoice
  • Bill of lading/ Airway Bill
  • Packing list

You can check out the official list of documents to import and export from Hong Kong on the official Hong Kong Customs and Excise Department website.4

Unlike shipping from Southeast Asian countries, exporting from Hong Kong requires you to have an export permit before you can ship your goods out. Additionally, if you’re shipping any restricted goods, you’ll need to apply for a special export permit for these goods before it can be exported.  More information on export permits from Hong Kong can also be found here.5

If you’re ever unsure about what kind of steps you need to take to export your goods from China, you can always check with our customs clearance experts if you’re unsure of which documents to apply for and how to declare your goods.

After checking these documents and clearing your shipments for export, your shipments can be loaded onto a vessel or uplifted onto a plane.

For merchants shipping B2C parcels, air freight is the faster option, especially if you’re testing Singapore’s market and need to ensure that your parcels reach your customers quickly. Shipments will take off from Hong Kong International Airport (HKG) and land at Singapore’s Changi International Airport (SIN).

Air freight is the preferred mode of transport for B2C eCommerce merchants thanks to its speed. However, in light of COVID-19, flights have been limited, causing the price for air freight to increase from the lack of cargo space. The flight limitations may also lead to delays in delivery speeds.

However, if you’re looking to ship in bulk, sea freight is the more economical option. As it can take a few days to a week longer, you’ll need to plan out your supply chain and take note of your inventory requirements.

Sea freight shipments enter Singapore via the Port of Singapore (SGSIN). This is a great mode of transport if you’re planning to set up a local distribution centre in Singapore. Shipments that are delivered via sea freight can be in full container load (FCL) or less than container load (LCL). Shipping with FCL means that you’re paying for an entire container to ship to Singapore, whereas LCL means you’re paying for part of the container, where the shipments are consolidated with other shippers’ shipments.

Having a local distribution centre allows you to fulfil more effectively within Singapore, and possibly even use it as a regional distribution centre in Southeast Asia. But for a strategic location like Singapore, you could also opt to have a regional fulfilment centre in a Free Trade Zone (FTZ) too if you’re looking to serve Singapore and beyond. That’s because goods stored at the FTZ have the benefit of deferring the payment of taxes on non-dutiable goods until they enter a country’s official borders.

 

Customs Clearance in Singapore

Your shipment will be transferred to a customs warehouse as soon as it arrives in Singapore’s airport or port.

To get import clearance into Singapore, you or your shipping partner would generally need to provide the following documents:

  • Certificate of origin
  • Master airway bill or bill of lading
  • Insurance policy
  • Receipt of payment of import duty and import-related taxes
  • Other relevant permits, licenses, and certificates

In Singapore, customs values imports using the CIF method, which means that the customs value of the order includes the cost of the goods and the cost of insurance and freight of the shipment. Singapore has a de minimis value of SGD 400, which in Singapore means that orders shipped via courier below this value are eligible for GST relief.6

If you’re shipping in bulk, you’ll need more documents prepared:

  • UEN Number (Unique Entity Number)
  • Commercial Invoice
  • Certificate of origin
  • Master airway bill or bill of lading
  • Customs Import Declaration
  • Insurance Policy (if applicable)
  • Receipt of payment of import duty and import-related taxes
  • Other relevant permits, licenses, and certificates

For bulk imports (also known as, your importing party must first register for a UEN with the Accounting and Corporate Regulatory Authority (ACRA) in Singapore and activate its customs account prior to importing into Singapore.7 Then, you’ll need to apply for an Inter-Bank GIRO with Singapore Customs so that you can pay for the relevant import duties, taxes and other fees to Singapore Customs directly.

Once your importing partner’s UEN and Inter-Bank GIRO are set up, the company will need to apply for a customs import permit via TradeNet. This can be done by the importing party or through a declaring agent or freight forwarder. To see different types of import permits or cases where import permits aren’t needed, you can check out Singapore Customs’s official website.8

The de minimis rate refers to a price threshold where no duties and taxes are charged if the shipment’s CIF value is below that point. The CIF value includes your good’s price, shipping fee, and insurance costs if any. But this exemption only applies to deliveries made via air freight, so shipping from Indonesia via sea freight still requires you to pay duties and taxes.

However, if your goods exceed the de minimis threshold, you’ll need to pay import duties and GST to Singapore’s customs. Singapore’s GST is at 7%, and the import duties depend on the product category as declared by the harmonised systems code (HS code). You may find out the percentage of your import duties paid through Singapore’s Customs website.9

If you’re shipping a B2C parcel, you can choose to either pay for the import duties and taxes yourself or let your customers pay for the import duties and taxes. This is determined by the incoterms Delivered Duties Unpaid (DDU) and Delivered Duties Paid (DDP). While we strongly encourage you to opt for DDP to keep your shipping experience smooth for your B2C customer, it helps to familiarise with what these arrangements mean.

After customs clearance is done, your shipment will be sent to your logistics service provider’s Singapore warehouse where it will undergo sorting and distribution.

Distribution and Last Mile in Singapore

Once your shipment has cleared Singaporean customs, it will enter the distribution stage. If your shipment is B2B, it can be delivered straight to your destination, otherwise, B2C shipments will have to be first sorted at a transportation hub prior to last mile delivery.

Your parcels in the last mile delivery stage will be sent from your partner’s warehouse in Singapore to your consignee’s address via vans or trucks. During the last mile delivery stage, your logistics service provider will ensure that your shipment is received by your consignee with a few delivery attempts.

Now that you know the steps in shipping your items from Hong Kong to Singapore, you’re in a better position to choose a suitable shipping partner who can cover the entire logistics service, or to find one whose solutions fit snugly into your existing supply chain. When choosing a logistics service provider for either eCommerce logistics or bulk freight, it helps to consider the cost, speed, delivery experience, and your whole supply chain before committing to a shipping solution.

If you’re looking for an air freight solution, a sea freight solution or even both to Singapore, Janio’s flexible, end-to-end delivery solutions have you covered from the first mile to the last. To find out more about our services and customs clearance expertise, contact us via the banner below.

Need to Ship to Southeast Asia via Sea, Air or Cross border Trucking? Get a quote here!

 

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References:

  1. Index Mundi: Singapore Urbanization – Demographics 
  2. Hootsuite/We are social: Digital 2020 Singapore 
  3. Ibid
  4. Hong Kong Customs and Excise Department – Clearance Document 
  5. Hong Kong Customs and Excise Department – About Permits 
  6. Singapore Customs – Importing by Postal or Courier Service
  7. Singapore Government – UEN 
  8. Singapore Customs – Import procedures 
  9. Singapore Customs: HS and Product Codes Search
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